An Oral History Interview with


Interviewer: .Anita Hecht, Life History Services Recording Date: July 9, 2011 Place: , . Length: 1 hour 40 minutes

Robert Kuttner was raised in City and graduated from in 1965 before earning his M.S. degree from the University of California. He then worked for journalist I.F. Stone and as a legislative assistant for the anti-war Congressman William Fitts Ryan. Kuttner also served as Washington bureau chief for Pacifica Radio and worked as a journalist for the Village Voice, the liberal Catholic weekly, Commonweal, and .

When Sen. William Proxmire became the new chair of the U.S. Senate Committee on Banking, Housing, and Urban .Affairs, Kuttner worked with Sen. Proxmire's staff as chief investigator. He researched foreign bribery by U.S. corporations, leading to the Foreign Corrupt Practices Act; mortgage redlining, leading to the Home Mortgage Disclosure Act of 1975 and the Community Reinvestment Act of 1977.

Kuttner recalls that "Sen. Proxmire was that rarest of political creatures, a tight-money populist. He was as tough on the excesses of capitalism as any member of the House or Senate. He believed that powerful industries needed to be regulated in the public interest. But he was just as tough on government excess."

"ranscript 1 Proxmire Oral History Project PROJECT NAME: PROXMIRE ORAL HISTORY PROJECT Verbatim Interview Transcript NARRATOR: ROBERT L. KUTTNER INTERVIEWER: Anita Hecht INTERVIEW DATE: June 9,2011 INTERVIEW LOCATION: Boston, Massachusetts INTERVIEW LENGTH: Approximately 1 Hour, 40 Minutes

KEY: RK Robert Kuttner BP Bill Proxmire HMDA Home Mortgage Disclosure Act CRA Community Reinvestment Act RESPA Real Estate Settlement Procedures Act



Hour 1/00:00 RK's Family/Work History Early Interest in Journalism/Politics

Hour 1/10:00 Merging Journalism and Politics Impact of Vietnam War RK's Knowledge of BP Beginning Work for BP RK's Impressions of BP

Hour 1/21:00 Banking Lobby vs. Banking Committee BP's Refusal to Take Special Interest Money Redlining Issue

Hour 1/30:45 Community Group's Involvement with Redlining Opposition to and Passage of HMDA

Hour 1/40:00 BP's Attributes as Senator Effect of HMDA Opposition to and Passage of CRA Importance of Grassroots Lobbying Effect of CRA

-crept Hour 1/50:20 Foreign Corporate Bribery Investigation BP's Staffs Response to Legislative Successes


Hour 2/00:00 BP's Views on Bank Regulation RESPA Legislation Renegotiation Board

Hour 2/10:35 Golden Fleece Awards BP's Attributes as Boss BP's Simplistic Lifestyle

Hour 2/20:00 Creation of the National Neighborhood Reinvestment Corp. Senators' Perception of BP BP's Quirkiness/Work Ethic BP's Influence on RK

Hour 2/30:25 RK's Disagreement with BP on Glass-Steagall BP's Influence on RK's Post-Senate Career BP's Legacy Speculation as to BP in Today's Political Climate

Robert Kuttner Interview Transcript HOUR1

Hour 1/00:00 RK Family/Work History, Early Interest in Journalism/Politics

The date is June $ in the year 2011. My name is Anita Hecht and I have the great pleasure and

honor of interviewing Bob Kuttner on behalf of the William Proxmire Oral History Project of the

Wisconsin Historical Society. And we find ourselves in Bob's beautiful home here in Boston on

Beacon Hill, Massachusetts. So thankyoufor agreeing to participate.

You're most welcome.

So, just in the interest of learning a little bit about the people who surrounded Bill Proxmire,

let's start with your date and place of birth.

I was born in , April 17th, 1943.

And can you tell me just a little about your family history?

Sure. My parents were of the generation that faced some hardship during the Depression. My

mother's family had grown up upper middle class. My father's family had grown up middle

middle class and then my mother's family lost everything in the Depression. They moved to New

York, where my mother met my father. My mother's family had been from Boston. My father's

Robert Kuttner Interview Transcript 4 Proxmire family was from New York. And he never got a great deal of traction in the '30s. They got

married in 1935. He was drafted shortly after I was born. They deferred his basic training for a

few months. And then he went off to basic training and shipped out late in 1943, was in a

division that was in France just after the Normandy invasion. He was taken prisoner in the Battle

of the Bulge, came back, barely survived the war, and then lived another few years - died when I

was only nine. My mother remarried. My parents, after the war, had moved from the Bronx to

Scarsdale for the schools.

For your benefit?

For my benefit. And [I] probably grew up in the most modest house in Scarsdale that happened to be in the Scarsdale school district. So that gave me a sense of class at an early age. And I think the combination of my mother having lost everything in the Depression when she was a young

woman, and my father never having gotten traction in his career, and the fact that the VA

[ Veterans Administration, now Department of Veterans Affairs] was a word that

was used in my house a lot when I was a little kid because when my father was sick, he was in a

VA hospital; and Social Security was a word that was used in my house a lot because my mother

managed to stay middle class after my father died, thanks to veterans benefits and social security

survivor benefits - and so I was - even though they were not particularly political, they were of the Roosevelt era - and so I was primed to grow up as something of a liberal. And then being a

lower middle class kid in a rich town - that kind of primed me to have a political sensibility

about economic injustice and class. And then I went off to Oberlin in 1961 and, of course,

Robert Kuttner Interview Transcript 5 Proxmire Oberlin has a whole history as a politically radical, in the best sense of the word, institution, and this was the beginning of the Vietnam War years.

So you graduated from a public high school?

I graduated from Scarsdale High School in '61 and then entered Oberlin - graduated from there

at c65. And that was the - what I like to think of as the sweet, idealistic part of the '60s, before it

all went into acid trips and nihilism. So I guess my formation as a young man was as a, you

know, kind of a left liberal, but a hopeful, idealistic left liberal. And I went on to Berkeley to get

a graduate degree and was very uncomfortable with the kind of nihilism of some of the

radicalism at Berkeley. I was always much more comfortable being on the left edge of

mainstream politics rather than being on the right edge of far left politics. And that's where my

politics have always been. So I went from there to -1 worked for I.F. Stone, the great,

independent journalist. And then I took a job with one of the first anti-war congressmen, William

Fitts Ryan from New York - that's Fitts - F-I-T-T-S. And then went to work for Pacifica, which

was the precursor to National Public Radio. The Pacifica Foundation invented listener supported

radio in the '40s. And I set up their Washington bureau. I worked for WBAI, which was their

New York station, as the program director and then the general manager.

Can I ask you a few questions before we go on?


Robert Kuttner Interview Transcript 6 Proxmire You said that your family wasn't necessarily political, but did you follow politics as you were in

high school? I'm just thinking about the McCarthy era.

Oh, yeah. Yeah, I did debate - very much so. But I sort of - it was not one of those families that

was politically self-conscious or all that intellectual. That is to say there were not yards and yards

of bookshelves of serious books. There were Reader's Digest condensed books. And they were

bright people, but neither one graduated college.

And so when you finished high school in '61 and you went on to Oberlin —


What kinds of goals or hopes did you have for yourself? Did you already see yourself going

somehow into government, politics, journalism?

I think I was torn between getting a doctorate and being a college professor or being a journalist.

And after one year at Berkeley in a doctoral program - you know, in the midst of all kinds of

social chaos - it felt too rarified and too boring, too arcane, to go on for a doctorate. And so I

decided I would do what I did as ajournalist, but as an e/Tgoge journalist, if you will, not in a

kind of "nothing but the facts, ma'am" journalist. And I think by the time I was twenty-two or twenty-three, both my politics and my vocation were pretty well set. And what's interesting

about my years with Proxmire - I mean, I spent probably a total of five years being other than a journalist, three of them with Proxmire, one of them working for a Member of the House - at the

Robert Kuttner Interview Transcript 1 Proxmire time, I kind of viewed that as a sabbatical from j ournalism, something that would round out my

knowledge about how politics worked, something interesting to do. But it turns out to have been

much more important, in retrospect - I'm jumping ahead of the story a little bit - because the

years I spent with Proxmire really were where I learned about finance and banking and how the

economy works. And I went on to be -1 mean, most people think of me as an journalist - and where I cut my teeth on that stuff was, of course, at the Senate Banking

Committee. So, I mean, at the time, I was sort of champing at the bit and saying, "Okay. I really

need to get back to what I really do, which is journalism." But, in fact, it was much more

important than that.

Well, we '11 get there, for sure. So you left academia.

Uh-huh. (affirmatively)

And you came back to the east coast.

Came back to - well, I was just in Berkeley for a year. Berkeley fortunately had a one year MA

[Master of Arts] program that was the first step in a doctoral program. So at least I got a masters

degree out of the deal. Most masters at that time took two years. But yeah, I came back to


Well, this was during the years of the draft for the Vietnam War.

Robert Kuttner Interview Transcript 8 Proxmire Right. And there's a whole other story, (chuckling) So, I got hired by the National Student

Association. And for reasons that were mysterious, somehow the National Student Association

staff got a draft deferment. And about three months into my year at NS A [National Student

Association], we all found out why that was the case - that NS A turned out to be a CIA [Central

Intelligence Agency] front. And so I was part of the group that blew the cover on the CIA and

exposed all that stuff. So I left there and work for Izzy [I.F.] Stone and then went to work for

William Fitts Ryan right after that.

Hour 1/10:00 Merging Journalism and Politics, Impact of Vietnam War, RK's Knowledge of BP, Beginning Work for BP, RK's Impressions of BP

Both who were outspokenly against the Vietnam War.

Oh, very much so, yeah. And I think that among my crowd, the big argument was: are we

opposing the war as liberals or as radicals? Meaning, as Norman Thomas was famously quoted

as saying, "You don't want to burn the flag. You want to wash the flag." And in the first years of the war, it was radicals who really took it on. I mean, sometimes liberals need radicals. It's one

of the things I firmly believe. If you look at the labor movement, liberals need radicals. But in

'69, with the great Moratorium marches, anti-war protests became mainstream. And it had to

become mainstream if we were going to end the war. And so the way I reconciled my political

views with my desire to be a journalist was I went to work for a fairly lefty broadcasting group,

where I could have my politics and have my journalism, too.

Robert Kuttner Interview Transcript 9 Proxmire And was Vietnam one of your main issues that you —

Well, you couldn't escape it. I mean, it was one of everybody's issues. I mean, it just pervaded that generation if you were a liberal or a progressive. So I was - you know, when I was at

Pacifica, and that was -

'68/ '69?

Yes, It was '68, '69, '70, '71. I was also at The Village Voice. I wasn't only writing and

broadcasting about the war, but you couldn't escape it. I mean it was the main thing that was

going on.

What were some of the other issues that you were interested in or reported on?

Politics, regulation. I mean, I was interested in economics early on.

You were.

But it wasn't until after I worked for Proxmire that it became my dominant focus as a journalist

when I went back to journalism in '79.

Robert Kuttner Interview Transcript 10 Proxmire Well, when you were a legislative assistant to Fitts Ryan and you were then doing journalism afterwards, how much did Proxmire figure intoyour scope of interest? Did you have him on your radar?

Barely. I mean, in those years, there were probably at least forty great, principled, progressive

Senators. It's hard to imagine. But there was a whole generation of people. In '58, there was a very large class of Democrats who got elected to the Senate. This was a kind of precursor to the

[presidential] election of John Kennedy. And a lot of them were Midwestern. And they were great, great men - almost all of them were men - you know, Phil Hart, Warren Magnuson and

Mike Mansfield and Frank Church. And you could just go on and on and on and on - Gaylord

Nelson. They were serious. They were politically serious. They were intellectually serious. They were fine legislative craftsmen. And they were people you could really admire. They were lions compared to most of what we've got today. And Prox was one. So I was aware of them. I mean, he was - at that point, he was the Chair of the Consumer Affairs Subcommittee of Senate

Banking. But he - you know, he was interesting, because he had this interesting, quirky history of having run for office many times before he got elected and being the guy who took Joe

McCarthy's seat, and never taking any money, and being kind of a tight-money progressive. So, you know, if you were at all interested in politics and followed the Senate, you were aware of him. But I'd never met him. And so, you know, I was on The Post for a couple of years and when I left The Post - are we skipping ahead, or shall I let you do this chronologically?

That's fine. No, I mean, unless there's some other things that you knew about him and some of his legislating before you got there.

Robert Kuttner Interview Transcript 11 Proxmire Not really.

Or his personal history.

Yeah, I was covering regulatory stuff for The Post in '74 and '75. And then when Proxmire

became Chair of Banking, which was January of '75 and Ken McLean moved up from his guy

on the Subcommittee to being Staff Director of the full Committee, I think it was Mike Pertschuk

who introduced me to Ken. And Pertschuk had been Magnuson's top guy and he and I were

friends from consumer movement politics. My wife had worked for Nader and I was just sort of

part of that.

So you knew Proxmire's work on consumer protection?


And the different pieces of legislation.

Yeah, but not intimately.


And so - but he was a very logical guy for me to go to work for.

Robert Kuttner Interview Transcript 12 Proxmire Did you have a desire to go back to Capitol Hill, or how did that — I mean, you had been there,

then you —

Well, but I was there in a much more junior position. I mean, I was a twenty-four year old

legislative assistant to probably the single most left wing member of the House. That's a fairly -

it's the most junior professional job there is. And so fast forward, I've now spent six or seven

more years as a journalist, I've been on the national staff of The Post, so I've got a lot more

experience under my belt. And it turned out that Ken and Proxmire were both looking for

someone who was an investigative journalist to be the Committee's chief investigator. So I was


Was it rather serendipitous, then, that you found out—

Yeah, it was - you know, there's a classic article in sociology by a man named Mark Granovetter

called The Strength of Weak Ties, about the randomness by which most people get jobs -

somebody knows somebody, somebody's cousin hears that somebody's looking for work. I think there's a lot of truth to that. And so, it, you know, it happened that Ken was looking for

somebody and Ken and Pertschuk were sort of peers. They were both staff directors to an

important, progressive member of the Senate.

And you were looking for work.

Robert Kuttner Interview Transcript 13 Proxmire And I was looking for work. And so Ken and I hit it off. And then I had my interview with

Proxmire. And I think I mentioned this in the pre-interview, this marvelous thing on his wall.

Most Senator's offices are just festooned with pictures of the Senator with this dignitary and that

dignitary. It always reminded me of a delicatessen, where you have celebrities - every celebrity

who's ever come into delicatessen is up on the wall. And Proxmire's was rather spartan, but he

had this one framed sign. I remember it as a sampler, but that could just be memory playing a trick with me. And it said, "Success is the ability to survive failure." And I was just very

charmed by that, that somebody would have that as his epigram on his wall. And I had a rough

couple of years in one of the jobs that I had. And I said, "Wow! That is really profound." So we

must have hit it off in the interview because they offered me the job.

Do you remember anything else about the interview — what he asked you, or what was


You know, I don't.

Any impressions of him?

Well, smart and utterly unpretentious and likeable. And Ken just wanted to make sure that I had the technical skills. You know, he wanted to know if I could read a balance sheet. He wanted to

know how much work I'd done in finance. And truth to tell, I hadn't done a whole hell of a lot

but I figured I could learn it.

Robert Kuttner Interview Transcript 14 Proxmire Back to the epigram.


The little saying. Do you know who wrote it?

Proxmire wrote it.

Do you think?

Oh, I googled it.


I mean, I can't find it anywhere else. I think he just inferred that from his own experience.

So describe the position a little bit, of being a chief investigator on the Banking Committee.

Well, at that point, there were a relatively small number of professional staff. There was Ken. I think there - because a Senator has staffers assigned to the committee and then he has staffers

assigned to his personal office. So I was on the committee staff. And I think there were four of

us. And, you know, not all legislation has an investigative component. But some of the hearings that you do are investigative. Some investigations result in legislation, some don't. Some are just

Robert Kuttner Interview Transcript 15 oversight hearings where you're looking at how an agency is performing its duties or you're

looking into wrongdoing in an industry. And so what I did ran the gamut. I mean, Ken had me

write a consumer's guide to banking. But what turned out to be the most important and the most

vivid piece of work that I did which ran through the whole three years that I was there was on

bank redlining. And that did involve some investigation of banks' practices of denying credit to

communities based on rules of thumb - Is it poor? Is it racially changing? Is it black? Rather than

on the credit worthiness of the individual applicant. And that became the thing that I probably

spent more time on than anything else.

Hour 1/21:00 Banking Lobby vs. Banking Committee, BP's Refusal to Take Special Interest Money, Redlining Issue

Well, before we get into the details of that —

Yeah, yeah.

Can I just ask you what you knew about his appointment as Chairman of the Banking

Committee? I know you had mentioned earlier that it had been —

Oh, yes. Well -

Attempted to be blocked by the banking lobby.

Robert Kuttner Interview Transcript 16 Proxmire Sure. In those years, with rare exceptions, Committee chairmen ascended to their position based

on seniority. And that meant not just seniority in the Senate, but seniority within the Committee.

So he was second to John Sparkman, who was the previous chairman. Sparkman was very

centrist, rather conservative Democrat who was from Alabama. But he was a relative racial

liberal by Alabama standards. But he'd been, I think, Stevenson's running mate in either '52 or

c56. So he wasn't a, you know, an outright segregationist, but he was very close to the banking

industry. They were very comfortable having Sparkman as their chairman. And Prox was as

progressive as it got on the Banking Committee. So the banking lobby tried to figure out how they could block this. And I think they were at least as afraid of Ken as they were of Proxmire,

because the two of them worked hand and glove. And Ken was a very shrewd, very well-

informed staffer. So, when the chairmanship of the Senate Foreign Affairs Committee opened

up, Sparkman, at that point, was number two on Foreign Affairs. That was most prestigious, so

he wanted to move over and that meant Proxmire moved up to the chairmanship on banking.

And I think that they tried - they realized that there was no inside game that they could play to

block this, so they couldn't block it.

Nor could they get him in their pocket.

Oh my god, no, no. And, you know, Proxmire's refusal to take money from anybody was

legendary. And I will tell you as many stories as you want to hear about that.

Robert Kuttner Interview Transcript 17 Proxmire Oh, I do. I would love to hear a few — and whether or not you have any insight as to where that

came from in his past. I don't know if you can illuminate that. But, I mean, it seems so strange

today that —

Totally, yeah. You know, I don't; maybe Ken does, maybe Howard does, maybe somebody else

does. But when I came on the scene, it was just known that Proxmire would not take any money

from anybody. And he was famous -1 mean, they had just passed campaign finance reform in the wake of Watergate, and so anybody who ran for office had to file expense reports. And

Proxmire's expense reports were typically, you know, in the low two digits. I mean, he spent

four dollars and sixty-eight cents. And it used to drive the banking and the other lobbies that

worked our committee crazy that there was no way that they could get him on the take. And he

also had a rule that his staff was not allowed to take anything of value. This was not a Senate

rule. This was a Proxmire rule; not that we would have. But the week before the Christmas

break, there would be carts coming around laden with bottles of booze that were Christmas gifts

from the American Bankers Association or the National Association of Realtors. There were all

- Savings and Loan League - the various lobbies that worked our committee. And they would

pass out bottles of scotch and what have you. And, you know, they'd pass right by our door.

Well, one year, I get in the mail in January a little certificate from Children's Hospital thanking

me for the gift that had been given in my name by the American Bankers Association. So I called them up and I said, "How much was the gift worth?" They said, "Fifty bucks." So I called Ralph

Nader and I said, "Would you do me a favor? Would you please send a gift of fifty dollars to the

American Bankers Association in the name of Bob Kuttner?" because I didn't want to be taking

any money, even indirectly.

Robert Kuttner Interview Transcript 18 Proxmire Why Ralph Nader?

Because Ralph Nader, as far as the American Bankers Association was concerned, is the devil


Right, okay. That's funny.

No, I'm sorry. I told that story backwards. It was - yes, I had it exactly backwards. Let me just

retract that. "Send an acknowledgment to the American Bankers Association that Bob Kuttner

has sent Public Citizen a gift in the name of the American Bankers Association to Public


Yeah, okay. Got it. Okay, so nobody on Proxmire's staff got bottles of scotch or anything else.

No. And so what it meant was that when Proxmire was making a decision on how to proceed,

how to vote, which issues to take on - the only thing that weighed on his mind was: What was

good policy? What was good for the citizens of Wisconsin? He owed nothing to any special

interest group. And you compare that with today or even back then - quite remarkable. And so

he made decisions and cast votes and set priorities based on the merits, based on his perception

of what was good public policy, which is what I would like think the founders of this Republic


Robert Kuttner Interview Transcript 19 Proxmire The Jeffersonian type of Senator?

Yes, and Jeffersonian in both senses of the word in that he was not a big government guy. I

mean, he was a progressive and he understood the need for consumer regulation, but he famously

did not like waste in government. And I think that whole side of him, from the Golden Fleece

Awards to his leadership on such issues as the Renegotiation Board - which renegotiated

contracts after the fact with the Pentagon with other agencies to make sure there were not excess

profits - both reflected his own values and sensibilities and were superbly true to politics.

Because if you're a liberal from a swing state, you know, you can bulletproof yourself by getting

in bed with a right-to-life lobby or you can bulletproof yourself by being very much of a skinflint

when it comes to the public purse. And so I think this was both his own values and very astute


It surely went over well with Wisconsinites.

Oh my god, yeah. He would win by astronomical margins without spending any money. And I think I told you in the pre-interview this story about how he got in trouble for one of the Golden

Fleece Awards - the monkeys clenching their teeth - and my indirect involvement with that.

Well, let's talk in some detail then. We can either start there or with the redlining.

Well, I do want to come back to the redlining, because the monkey story you probably have from

somebody else. It's a cute story but I think the redlining stuff is much more important.

Robert Kuttner Interview Transcript 20 Proxmire Right. You had said that Ken handed you a folder.

Yeah. The week that I got to work - first week on the job - Ken hands me this folder,

"Redlining". It was where they had left off at the end of the previous session when Ken was a

staff of one on the subcommittees. So it turned out that there was a wonderful coalition of local

neighborhood groups who were doing battle with the banks. And the prevailing practice in a lot

of older, inner city neighborhoods was banks would simply define a whole geographic territory

and refuse to make loans there. And so the consumer groups were doing these heroic research

projects, but because of the way the data were kept, it was like bailing out the ocean with a teaspoon. They would have to go one transaction at a time. They'd have to send somebody to the

Recorder of Deeds, go deed by deed, look at who the lien holder was, and then tabulate which

banks were making loans in what neighborhood.

Hour 1/30:45 Community Group's Involvement with Redlining, Opposition to and Passage of HMDA

So these were community groups around the country?

Yeah. Now, this is '75, so this is a few years after the heyday of the War on Poverty. A lot of these groups had their roots in community action agencies, but there were other groups and

coalitions that were mainly organized around housing issues and around multi-racial coalition

building. So, about two weeks into my first month on the job, a meeting was set up and a whole

bunch of these folks came into my office and said, "Here's what we want. We would like

Robert Kuttner Interview Transcript 21 Proxmire Congress to pass a law requiring banks to tabulate and disclose by census tract or by zip code the

number and amount of their loans. And that way, we can easily tell and then publicize which

banks are putting money back into their communities in the form of loans, which banks are just

siphoning money out of communities by taking in deposits but not making loans. And then we

can spotlight the good guys and the bad guys." So I realized, and I already knew from Ken, that this was perfect Proxmire; that is, it wasn't setting up a big government bureaucracy, it wasn't

expensive. It was using the energy of citizens to hold banks accountable. So this was right up his

alley. So we -

It didn 't really require public dollars to be spent.

No, no. I mean, you could not - and it turned out to be what I later called, "regulation as an

organizing tool". You write regulations not to empower bureaucrats, but to empower regular

people. The way these data would be tabulated and made public would energize these consumer

groups. So, we organized four days of hearings. We must have had twenty or thirty different

consumer groups, neighborhood groups, from around the country testify. And we beat the

bushes. We found one banker and one S&L [Savings and Loan] guy who thought this was good


Two new bankers total, or two —

In the whole country.

Robert Kuttner Interview Transcript 22 Proxmire Wow.

Yeah - one Savings and Loan, one banker. It was Todd Cooke from the Philadelphia Savings

Fund Society and Ron Grzwinski from - and you should interview Ron if you haven't

interviewed Ron.

From Chicago?

Yeah. From what was then South Shore National Bank, saying, "This is good policy." I still have the hearings. I have the whole hearing record downstairs in my basement. And then the

American Bankers Association and all of the trade associations testified against it.

So you had huge opposition.

Yeah. The administration testified against it. The Federal Reserve testified against it.

On what grounds?

Well, the boogeyman was credit allocation. "This is government telling banks where they should

put their loans and, we don't want to do that. We want the to do it." Well, the irony

is that you look back at that hearing record after forty years. It wasn't reinvestment in low

income communities that crashed the system. I mean, it was the invention of subprime. It was the

invention of credit default swaps and deregulation. And if banks had stuck to their knitting, you

Robert Kuttner Interview Transcript 23 Proxmire never would have had the collapse. And the other thing we did - I'm getting ahead of my story -

but part two of this was another piece of legislation - the Community Reinvestment Act - which

is much reviled. I'll come back to that in a moment. But, so this is 1975. Gerry Ford is still

President. And Proxmire was just a master legislative tactician. And so we cobbled together a

coalition of outside groups - all the consumer groups and the unions and the civil rights groups.

And I don't think the bankers took us seriously. I don't think the bankers mobilized quite as

much as they needed to. The issue was kind of a sleeper. And Proxmire worked his colleagues

one at a time, lined up the votes. I mean, the way you do this is the staff person contacts his

counterparts at the staff level of other Senators and you get a sense of whether they're with you

or against you or leaning one way or the other. And then Prox works the member. And in those

years, staff was allowed on the Senate floor. You couldn't bring your whole staff, but when a bill

was up, you could bring the Senate staffer who was working on the bill. And so we looked at the

final head count. And Prox had two votes to spare if he needed them. I learned so much about

how a really shrewd legislative tactician works.

He had two votes —

Well, I'll tell you how it works. So we had our head count. And we were going to win by two

votes, which is not a very big margin.

In the committee?

No, on the floor.

Robert Kuttner Interview Transcript 24 Proxmire On the floor, okay.

Committee I think we got it out by two votes also.


In those years, you actually had liberal Republicans, so we had Ed Brooke from Massachusetts

and I think we had one other. And then we had a couple of wobbly Democrats who were very

much in the pocket of industry - Pete Williams from New Jersey, who later went to prison, and

Alan Cranston from California, who was very liberal on issues like war and peace and

environment, but very conservative in terms of being very close to the various industries because

he raised a ton of money from the industries. Boy, did I learn a lot about how things really work!

But, anyway, so we got the thing out of committee and Proxmire told me that he had talked to the two Democrats from West Virginia - Robert Byrd and Jennings Randolph - and they really

didn't want to vote for it because their bankers were putting a lot of pressure on them but they told Proxmire if he needed them to vote for it, they would vote for it. That's how this works.

That's why sometimes these close votes go right down to the wire because the leader, or in this

case, the floor leader, who was Proxmire, you know, has some contingent commitments that he

can call on if he needs to - people who really don't want to vote for something but, as a favor, they'll do it.

And then he's expected also to return the favor?

Robert Kuttner Interview Transcript 25 Oh, sure, yeah, yeah. And even though Proxmire was a maverick in some ways, he was not an

outsider. I mean, he was - you know, he had his own idiosyncrasies. He ran to work and he

didn't take any money - and all that stuff. But when it came to being a member of the club, he

really knew to legislate. So, Byrd and Randolph wait and wait and wait and wait and they wait to

see whether he needs their vote, and they don't. So then they come up to the well of the house

[Senate] and they vote "Nay." So it carries by two votes. And I think what we did - Ken can

check my memory on this - I'm confusing this with the Community Reinvestment Act -1 think

we tacked it onto an omnibus bill in the House.

7 do remember that one of the things Ken said is one of the ways that Proxmire got it through

was to have it sunsetted so that it had to be reviewed every five years, and that was one of the


Yeah. I think it was every ten, but -


The point is we got it through. And it actually got stronger the next time it had to be renewed. I think that was CRA. I think Home Mortgage Disclosure Act, HMDA, I think is permanent

legislation, but I could be wrong. But the point is - he was a very astute legislator, as well as a

very brilliant Chair of the Committee in terms of how he conducted hearings.

Robert Kuttner Interview Transcript 26 Proxmire Hour 1/40:00 BP's Attributes as Senator, Effect of HMDA, Opposition to and Passage of CRA, Importance of Grassroots Lobbying, Effect of CRA

Do you have any specific memories of a hearing or a moment where you just went, "Wow!"?

Yeah. You know, so one of the jobs of a senior staffer is to basically script the hearing, so you're

writing out questions. Proxmire would go off script and his questions would be better than my

questions, and I was pretty good. And I remember one hearing in particular -1 mean, the way it

would work is there were four of us. We'd kind of go in rotation, so you might have one or two

hearings a week and a particular staffer would be sitting at the committee table or sitting behind the Senator helping the Senator orchestrate the hearing. And then the other three people would

be, you know, working on whatever was up next - the week or the week after. They'd be just

doing their homework or arranging witnesses for the next hearing. But we'd all come into the

committee room for all of the hearings, which were typically in the morning, you know, just to

keep up with the flow of committee work. So I recall one hearing where Ken and I and the rest of the staff were sitting at the staff table. I don't remember what the subject was, but Proxmire was

on fire. He was just spectacular. And I said to Ken, "God, he is just in fantastic shape. Who

staffed this?" And he said, "Oh, Prox staffed it himself." He stayed up late and just did all of his

own staff work. So the best staffer was the Senator. And that is not characteristic. A lot of these

guys are talking dogs who are totally dependent on the staff. Everything is scripted. And he was

also a man of great charm and affability. There was nothing mean about him. He was likeable.

And he would enjoy sparring with these bankers, but keeping it on a level that never got nasty,

never got personal.

Robert Kuttner Interview Transcript 27 Proxmire 77e was civil in every way.

Well, he was beyond civil. He was charming. And even in the colloquies with Republicans, who

had a completely different view of the world, he never lost his cool. He never got vicious. And it

was just absolutely admirable.

So did the passing of the HMDA, was that — did it have its hoped impact?

Well, so we said, "This is pretty cool." We passed this bill and then the groups set about using the data and exposed the extent of redlining and we said, "Let's see what else we can do." So I

came up with this idea of creating an affirmative obligation on the part of banks to proactively

seek out opportunities to extend credit to poor neighborhoods - the same, modeled on

affirmative action.

So it's not only just that you have the data about how discriminatory practices are being used,

but you 're actually —

You have an affirmative obligation to reverse those practices. Well, the industry really went

berserk and it was basically a repeat of the experience with HMDA. I mean, we had hearings.

The bankers really felt that this was the government telling them how to run their business. And

we put a few magic words into CRA that banks shall have this affirmative obligation to serve all

parts of their communities consistent with sound credit standards. Now, if that had been enforced

Robert Kuttner Interview Transcript 28 Proxmire and that had been extended to subprime lenders, there would have been no economic meltdown,

because what the banks did with subprime and with securitization of mortgages was they made

loans that were not consistent with sound credit standards. They made loans to, you know,

anybody who could sign a piece of paper. And so the irony is that some of the conservatives

have blamed CRA for the crisis. It was exactly the opposite. Had they followed - and there's a

lot of studies out on this that show that it wasn't the banks that were subject to CRA that got into trouble, it was the mortgage companies that were not subject to CRA - that were affiliates of

banks - but through this loophole, they could make these no documentation loans.

Yeah, the CRA didn 't lead to high risk lending.

No. On the contrary, if it would have been forced, it would have prevented high risk lending.

So how did that one get through?

Same story. I mean, we held hearings. HMDA is more vivid in my mind because it was sort of

early in my tenure and it was the first one. But the same thing - we held hearings, we - all the

consumer groups and built a coalition out in the country, built a coalition of Senators. And I think it might have even been one vote on CRA. It squeaked through. Carter was President by then. So HUD [Department of Housing and Urban Development] did not like it, but there wasn't the open hostility that there was - HUD sort of waffled on whether they thought this was a good

idea. The Fed [Federal Reserve Board] didn't like it, the banking agencies didn't like it, the

banking industry didn't like it, but we had the votes.

Robert Kuttner Interview Transcript 29 Proxmire Through kind of a slender working minority and the support of the community groups and



That sort of pressure, do you think, led some of the Senators to give you their vote?

Yes, because grassroots lobbying is terribly, terribly important. I mean, if a Senator's hearing

from folks at home, and you've got the churches and you've got civil rights groups and the labor

unions, who were a lot more powerful in those years. And, you know, Senators aren't supposed to lobby other Senators, but the way it actually works is a Senator who is pushing a piece of

legislation works with a coalition of groups to try and enlist the support of other Senators, and that includes staff work. It includes face-to-face work on the part of the Senator with his peers. It

also includes, very importantly, in an issue like this, grassroots lobbying, where you know the

bankers are on the case, putting pressure on the Senator to vote against it, so you've got to get

some activity on the other side to make the Senate realize that it might be a good thing if he or

she voted for it. And, you know, the cast of characters was slightly different. The Senate that was

in office in '77 was not the identical Senate quite that was in office in '75. It was mostly the

same cast of characters. And it was pretty much the same script. I think it was more far reaching

legislation, in that HMDA simply created tools for organizing; whereas CRA created a piece of

regulatory leverage. So what would happen would be banks still get CRA reviews. And if the

Robert Kuttner Interview Transcript 30 Proxmire review shows that they're doing a lousy job and they want something from a regulator -

permission to merge, permission to -

Open a branch or something?

Well, branching - in those years, you needed permission to open a branch. You don't need

permission to open a branch now. So in those years, there was more regulation. There was more

leverage. But there is still some leverage - mergers, in particular. And there were mergers that

were blocked because the bank got a lousy CRA review. So it was real teeth. And also, the

reviews were public record and then that gave the community groups more leverage to go in and testify to the regulators, saying, "This bank is a bad corporate citizen and you should demand that they take remedial action." So it really was, you know, a very potent form of regulatory

leverage that increased the supply of credit to lower income neighborhoods.

Did you see that first hand here in Boston?

Well, sure. The thing that I think makes me proudest of being involved with that was that

because banks had to do it, they started hiring loan officers to learn how to make loans to

moderate income people and marginal small businesses, so that thirty years later, forty years

later, you have a whole cadre of thousands - and I literally mean thousands - of loan officers

who are believers. And there are conferences - because I get invited to them. I get invited to them and, "Hey, this is the guy who wrote this," to give speeches. And these are bankers who think of themselves as good community citizens who are proud of what they do. So thanks to this

Robert Kuttner Interview Transcript 31 Proxmire legislation, you have a whole species of banker who did not exist except for the odd one off, like

Ron Grzywinski, but you could count them on the fingers of one hand. Now there are thousands

of them.

Hour 1/50:20 Foreign Corporate Bribery Investigation, BP's Staffs Response to Legislative Successes

So you think that still exists today? That's great.

Oh, it does. Now, unfortunately a lot of this was horribly set back by the subprime crisis. I mean,

what the subprime crisis did, for example, to rates of home ownership in African American

communities was catastrophic. So now we got to do this all over again, but at least we've got this tool.

What do you think Proxmire would be doing if he were here today in light of the current financial and housing crisis?

Well, I think he certainly would have warned against the practices that led to it, as Paul Sarbanes

did. I mean, Sarbanes was a terrific chairman, very much in the same Proxmire spirit and it

didn't do any good, because the - you know, you had the Clinton administration back-to-back

with the Bush administration, both believing in deregulation. And we did other stuff. I mean, one

of the other things I worked on was the foreign corporate bribery investigation where we were -

I mean, this started out with Lockheed.

Robert Kuttner Interview Transcript 32 Proxmire Lockheed, right.

A bunch of other corporations that were caught bribing foreign governments to give them


Caught by whom?

Caught by the press, caught by something, you know, somebody spills the beans. And I can't

remember how this first came to light. But then we held a bunch of hearings. And so the idea

was that we should make it illegal, a felony under American law, for an American corporation to

bride a foreign public official. And there were two huge arguments against that. One was a

practical argument and one was a legal argument. The practical argument was, "Look, everybody

does this. You can't do business in some of these countries without paying bribes." The legal

argument was, "This is extraterritoriality. This is trying to extend the reach of American law to

something that occurs offshore." And we said, "Well, no. Sorry. We're talking about the

behavior of American corporate executives whose corporations are chartered in the United

States, who pay taxes in the United States and we think this will pass muster constitutionally,"

which it did. And it was another case of just doing our homework and having the votes. And, I

mean, these were years when there was a good, healthy Democratic majority in both Houses and

most Democrats were, with the exception of Deep South, were progressives. And so you could

actually legislate. And there were still liberal Republicans. I mean, I'm sure that the foreign

corporate bribery legislation got some Republican support. You'd have to look it up, but there

Robert Kuttner Interview Transcript 33 Proxmire were moderate, even liberal Republicans, who were principled public servants who didn't like

bribery any better than Democrats did.

So that one got through?

Yeah; signed by the President. It's still law today. And I think it has had the effect of damping

down, not eliminating, but bribery is less endemic than it used to be. And I think I'm right, that the European Union now has similar prohibitions.

Was that a difficult one to get through?

Yeah. Oh, yeah.

So all of these were long shots, it sounds like.

Yeah, and they depended on Proxmire's leadership. They depended on very effective coalition

building. And one other story I'd love to tell that shows what a gentleman Proxmire was. So, on

one of the hearings on the corporate bribery legislation, I was working late and the Japanese had

been involved in the Lockheed thing. And so the whole hearing room was filled with Japanese

reporters and TV crews and radio reporters. And I'm there and I've got thirty or forty Japanese journalists. And I had a Washington Post guy steal a classified document off my desk. I mean, it

was a hectic day. So I'm winding down. It must have been an equally exhausting day for

Proxmire. It's about eight o'clock and my buzzer on my phone rings. And this voice says, "What

Robert Kuttner Interview Transcript 34 Proxmire does Section 242(c) do?" And I had been handling press calls all day. I was exhausted. I had two babies at home and I was sort of juggling work and family and it was late at night. And I said,

"Who is this?" or "Who the hell is this?" And this voice says, "It's Bill Proxmire." I said, "Oh,

Senator, excuse me." (laughter) He couldn't have been nicer.

That's funny. So how were these successes celebrated by you all? Were they? Were there parties in the office? Did Proxmire celebrate? Did you just move onto the next task? I'm curious about the culture of the place.

I don't recall big celebrations or breaking out champagne or anything like that. I mean, it was more a sense of, "Hey, we did it." And, you know, the phone would ring and the various groups in the coalition who had been in the galleries or who'd been working the halls of Congress would be thrilled and we'd feel really good about it. But, you should check me on this. Proxmire was an understated kind of guy, and Ken was an understated kind of guy. And there was a lovely

Midwestern modesty and humility to the subculture of the whole place. And it wasn't the kind of place where bottles of champagne would be opened.

That's where I'm going to stop this tape.

Okay, sure.

Robert Kuttner Interview Transcript 35 XXX


Hour 2/00:00 BP's Views on Bank Regulation, RESPA Legislation, Renegotiation Board

This is hour number two of my interview with Bob Kuttner on June $ , 2011. You 've reflected on

some of this but I'm just wondering if you have any other thoughts on the proper role or what

Proxmire would have said the proper role of regulation is of the banking system, or any

suggestions he might have for today.

It would be speculative. I mean, he certainly felt that banks needed to be regulated. And all of the

consumer laws that are his handiwork, from, you know, Truth in Lending to Fair Credit

Reporting, to Equal Credit Billing, to HMDA and CRA, all reflect the fact that you can't trust

banks not to take advantage of consumers if you don't regulate them either to disclose things -

RESPA was another one - Real Estate Settlement and Procedures Act. And the proof of the

pudding is that once they started deregulating a lot of this stuff, it was like pulling on a thread

and the whole garment unraveled and the banking system went berserk and took the economy

down with it. RESPA was a really interesting case; a little bit obscure.

It's the Real Estate Settlements Procedure Act?

The Real Estate Settlement Procedures Act. So, to make a very long story short, when you close

a loan, there are all these little extra closing costs, settlement charges. And Proxmire realized that

R&bert Kuttner Interview Transcript 36 Proxmire there were all kinds of abuses - extra charges tacked on. And by the time the customer gets to the

closing, it's "take it or leave it." The borrower has no leverage. And you had all kinds of

conflicts of interest where the law firm that handles the closing for the bank is somebody's

brother-in-law and extra charges are tacked on, some of which are then kicked back to the bank.

It was like turning over a rock and seeing all these creepy, crawly things. So, Proxmire - and this

was before I got there - wanted to regulate it directly, to limit the extra charges that could be tacked on, to prohibit the conflicts of interest. He didn't have the votes. So the compromise was

disclosure. Now, if you've ever closed a loan lately, you've got a pile of papers about that thick.

And some of those papers are the result of having used a regime of disclosure rather than direct

prohibitions. So nobody likes it because it adds to the paperwork.

Red tape.

Doesn't really prevent the abuses and it gives government a bad name. So about a year into the job, Proxmire or Ken said, "We need to have some hearings on how RESPA's going, because

we're getting a lot of backlash." And I'm an amateur poet. So Proxmire gets a letter from a

realtor and it contains a poem, doggerel, that the realtor had written. "RESPA, RESPA, on the

wall, who is fairest of them all? Can it be his name is Proxmire? No, because it rhymes with

quagmire." So I wrote back about a twenty-four line poem for Proxmire's signature, explaining that the reason RESPA was such a mess was that the banking industry and the land title industry

had come up with it in order to head off direct legislation. So my closing couplet was, "Next time, counselor, don't be so snobby. The quagmire is the land title lobby." Proxmire loved it;

signed it. And the guy sent back a letter of apology. So we had fun. That's the other thing. Prox

Robert Kuttner Interview Transcript 37 Proxmire had a great time. He had a great sense of humor and it was not all earnest, wonky stuff. And it

was a really good group of people who liked each other, appreciated each other; had a good time.

Anything else on RESPA in particular?

Well, no. But it's a case of what happens when you don't have the votes to do it right and so -

here's the point - there's some areas where disclosure is exactly the right remedy - Home

Mortgage Disclosure Act. There are some areas where disclosure doesn't do a damn thing. It just

creates red tape. And the kind of disclosure that was mandated by RESPA, where the consumer just gets bombarded with forms - "Here's the true selling cost." "Here's your right of

rescission." And fifty other - "I certify that I am not exercising my right of rescission." I mean,

you know, it's like a parody of what lawyers do, and it's a function of not having had the votes to

regulate the abuses directly.

Did you think it did have the effect of making them more accountable?

Not much. And it wasn't our fault. It was the industry's fault because they fought us to a draw.

The other - I'll tell you another little bit of pre-history. You asked me had I heard of Proxmire.

Have you interviewed Dick Kaufman?

Um-hmm. (affirmatively)

Robert Kuttner Interview Transcript 38 Proxmire Okay. So, you know, and Dick is another - he really attracted very high caliber people - smart,

principled people. So one of the first times I got a close look at Proxmire was before I went to

work for him when I was on The Washington Post. And one of Proxmire - Proxmire would have these causes, like the Genocide Treaty or the Renegotiation Board. Has anybody talked to you

about the Renegotiation Board?

Um-umm. (negatively) Go ahead.

Okay. So in World War II, they had to get stuff built fast. So they negotiated these cost plus

contracts with sole suppliers. You know, the Navy needed thousands of ships, so the contract

would be, "You build these thousand ships to this specification and just bill the government and

add fifteen percent for your profit." But, in order to not be taken to the cleaners, the government

set up something called the Renegotiation Board, which was a post-audit. After the contract was

all over, all of the costs would be re-audited and then if it turned out that there were windfall

profits, the contractor would have to give the government, the taxpayer, some money back. And

over the years, it saved tens of billions of dollars. Well, starting in about 1946, the industry tried to shut this thing down and the liberals in the Congress kept it alive. So this is now thirty years

after the war, and due to the diligent efforts of Proxmire and a few other people, it still existed,

but it was on its last legs. The bad guys were gaining on it. And so literally my first day on The

Washington Post - The Washington Post, there would be clusters of four desks, so you would

have three desk mates. So I was the new kid. I was the youngest guy on the national staff. And

my three desk mates were three of the great reporters, all a half-generation or a generation older than I: Mort Mintz, Bill Greider and John MacKenzie. MacKenzie covered the Supreme Court,

Robert Kuttner Interview Transcript 39 Proxmire Greider, one of the legends, and Mort Mintz was the great scourge of corporate wrongdoing. And there was a last ditch effort to keep the Renegotiation Board alive, led by Proxmire. And he

didn't have the votes. And it was just a question of when it would go down and how long they

could keep it alive. So Mort had an inside source at the Board who was feeding him dirt on all this skullduggery that was going on. It was the Nixon administration. And he said, "I need you to

do me a favor." He said, "Here is the phonebook of everybody who works at the Renegotiation

Board" - about two hundred people. He said, "You and I need to divide this up and call every

one of them and say, "Hello, this is Bob Kuttner from The Washington Post. I'm doing a story

about the Renegotiation Board. Will you talk to me?" "No." "Thank you very much." Next call.

He said, "That way, tomorrow when my story is in the paper and the head of the board calls in

everybody and says, 'Alright, who's been on the phone with The Washington PostV everybody

has to say The Washington Post called them so that we protect our source." And I said, "Oh my

god, this is how it works in the big leagues." (laughter)

Hour 2/10:35 Golden Fleece Awards, BP's Attributes as Boss, BP's Simplistic Lifestyle


So that was one of the first times, sort of. And Mort - I mean, again, the way it worked was

you'd have a great journalist and a coalition of public interest groups and a principled Senator.

And the stuff would get into the papers and then the public interest groups would raise hell. The

Senator would hold a hearing, write legislation, and it worked very well. Now, guys like Mort

Mintz are gone and the public interest groups are much weaker, corporate America is much

Robert Kuttner Interview Transcript 40 Proxmire stronger, and there are fewer Senators like Proxmire - very sad. And I feel like I had the

privilege of sort of working at the Senate and working in the media in kind of a golden age and

it's going to take a long time to get that back.

At a time when it functioned, actually.


How was his use of the media, his knowledge of the media, Proxmire's?

I think it was superb. I think the Golden Fleece -1 mean, he got great press. He got very

respectful press because he didn't take money, he was whistle clean, he would be the champion

of slightly quirky legislation that turned out to be really important legislation. And then stuff like the Golden Fleece was just great copy most of the time.

Do you think it was effective in terms of curbing government waste?

No. It was just - it was a charming gimmick. I mean, I'm sure it saved the taxpayers a little bit of

money. And I think government agencies -1 know this - lived in terror of getting a Golden

Fleece Award. So I think it made the bureaucracy a little bit more alert to not flagrantly waste

money. But if you think about where the real waste is, it's systemic. It's not random abuses. It's the fact that we've spent a trillion dollars on wars. And that's not waste. It's the fact that, instead

of having national health insurance, we subsidize the private insurance company, the drug

Robert Kuttner Interview Transcript 41 Proxmire industries and the pharmaceutical industry. So the real waste is structural. So, in order to

demonstrate that you care about this stuff, you know, you can give a tongue-and-cheek award to

something particularly egregious. And that's fine. I mean, you show that liberals care about the taxpayers, too. Liberals don't just want to throw money at problems. And I told you in the pre-

interview, I'll tell you again, this sad story about the guy who got a grant from - was it National

Science Foundation or the NIH, I forget which, to study why monkeys clench their teeth. And a

friend of mine, Dan Greenberg, who wrote a science newsletter, told me about this and I passed

it onto Mort Schwartz. And Mort did the research and this became the Golden Fleece and Prox

ended up getting sued. So, you have to be a little careful with this stuff.

Because it named him specifically, right? The researcher rather than just the —

No, because it subjected him to ridicule that was unwarranted on the merits that damaged his

career. That was the - his contention in the lawsuit was that it was defamatory.

But if I remember correctly, there was never anybody named personally in another —

Oh, yeah, the researcher.

Golden Fleece Award.

Oh, is that right?

Robert Kuttner Interview Transcript 42 Proxmire The institution that funded the research was usually the recipient of the Golden Fleece Award.

That could very well be. But, you know, you as a member of Congress can criticize a private

citizen. And the bar is fairly high, because you're doing your official business. Well, in this case, the Golden Fleece was something that Prox just invented. It wasn't in the context of passing

legislation or doing a formal hearing. It was a thing that he did every month. And so he was a

little more vulnerable. And this guy apparently -1 mean, I - my only involvement in this was

passing a tip along to Mort, but apparently he persuaded - I forget whether it was a judge or a jury, who he persuaded - that this research had a legitimate purpose and that Proxmire's ridicule

had damaged his career in an unwarranted way.

Well, it's an interesting question whether the Golden Fleece ever had a chilling effect on

scientific research in general or not.


No. So you all had some fun as a staff did you?

Uh-huh. (affirmatively)

How was he as a boss?

He was a very benign boss. I mean -

Robert Kuttner Interview Transcript 43 Proxmire He hired high caliber people and let them do their work?

Well, you worked very closely with him. Ken was the day-to-day boss. Ken was both a very

exacting and a very fair-minded boss who worked very hard. He was utterly principled. And, you

know, when the subject that you were working on ripened and the time came around to work on the legislation or work on the hearing, you would typically have a meeting with Proxmire and

with Ken, and you'd go over the stuff. And he was utterly professional, smart as a whip, and

pleasant. You didn't have the sense that you do with a lot of these guys of somebody with an

enormous ego; not that he didn't have healthy ego strength. I mean, he had a clear sense of who

he was and why he was there, but he didn't have the sense of narcissism. You didn't have a sense

of it had to be all about him. There was none of that. There was - we were a team. We were there to do a job. No, it was as pleasant a working environment as I've ever worked in.

Was he frugal as a person like he was with the government dollars? Was he frugal with his staff?

Do you have any —

Well, he paid - the thing about the Senate is that there's a very narrow set of pay scales. And,

you know, I always felt I was paid fairly. I think he was quite normal in terms of what he paid

people. The offices were standard offices. There wasn't much room to maneuver. I think I was in

his house once. You know, he did not live ostentatiously. He had a nice house in Cleveland Park,

but he didn't flaunt wealth. I don't know what kind of personal wealth he had. And I think in those years, jogging to work was very, very, very unusual. I mean, it was unheard of. And so in

Robert Kuttner Interview Transcript 44 Proxmire that sense, I don't know if frugal is the right word, but it's the opposite of being picked up by a

car and driver. I mean, it suggests a kind of personal simplicity.

Well he was focused on his health, definitely.


From what I've heard—a very dedicated —

I think so. But I mean, you know, a person who is very full of himself wouldn't jog six miles to


He was also known for jogging around the State of Wisconsin and I'm wondering if you ever had

the opportunity to see him campaign or heard stories about this?

No. See, I was a Washington guy. I mean, I was not a Wisconsin person.

You never went back to Wisconsin?

No, no. There was a real divide between the people who worked on his campaign. Now, Howard

sort of did both things because Howard was his Chief of Staff.

Did you have much contact with his Senate office?

Robert Kuttner Interview Transcript 45 Yeah. I mean, it was - because there was a little bit of overlap. I mean, the Senate office needed to know what the Banking Committee staff was doing and vice versa. And then, you know, his

schedule was kept by his - I'm forgetting her name . . . what was her name in those years? Very

nice person ... so, you know, yeah, you needed to be on cordial terms with your counterparts on

his office staff. It was just down the hall. Oh, and there was a softball team. I still have the shirt -

The Senate Bank Robbers. There was a league, there was a softball league, and that was very


So you played on that?


And Prox did, too?

Hour 2/20:00 Creation of the National Neighborhood Reinvestment Corp, Other Senators' Perception of BP, BP's Quirkiness/Work Ethic, BP's Influence on RK

Yeah, I think so. I don't think a lot, but yeah.

Well, you know, it says something about him as a boss that he did have staff who stayed with him for their entire careers.

Robert Kuttner Interview Transcript 46 Proxmire Yeah. I mean, I was exceptional in that regard in that for me, it was a kind of, "Okay. I'm going to do this for awhile, but at some point, I want to go back to being a journalist." So I did it for three years and then I moved over to the National Commission on Neighborhoods. That was

another kind of fun thing we did. And then I went back to being a journalist. In the course of

doing this work on community reinvestment, we stumbled on a pilot program called

Neighborhood Housing Services that was this sort of do good creation of the Federal Home Loan

Bank System, which is the system that backs up Savings and Loans. And they had at that point

about twenty, where they would create a little office, a storefront, staffed by people who are

expert in housing. And they would help low income people navigate the system. So if you're

moderate income and you can just barely afford to become a homeowner, and you need to figure

out where to get a loan from a bank who's not going to rip you off and you need to figure out

how to do the rehab, Neighborhood Housing Services would help you put the pieces together -

wonderful program. And we really admired the guy who ran it. And it had been ongoing for three or four years. So I persuaded Ken and Proxmire that we should turn this into an ongoing

program. And the idea was to create a federally chartered corporation that would get direct

appropriations from the federal budget. Well, they didn't know what to do. I mean, they said,

"Gee," you know, "we're not really sure we're ready for this but we don't want to look a gift

horse in the mouth." And then HUD [Housing and Urban Development] was very anxious about this because this was sort of a rival free standing agency. And so we did it. We created by

legislation, the National Neighborhood Reinvestment Corporation. And it went on to do

wonderful things.

What happened to it?

Robert Kuttner Interview Transcript 47 Proxmire It's still around.

It's still around?

Still around. And we got a lot of Republican support, because this was very small-c conservative.

This was the American dream. This is for people who want to work hard. And it was a project of the industry. The industry was very proud of it. So that was a case where bipartisanship could

actually work.

And also where Proxmire favored some appropriations for —

Yeah, but it was peanuts. It was a little bit of money. It was probably ten or fifteen million

dollars a year, which must have quintupled their budget, but he got a ton of leverage out of it

because it leveraged a lot of private money. I'm trying to think of what else . . .

Do you have a sense of how he was seen inside the beltway by other Senators?

Smart, a little quirky, surprisingly effective, principled, incorruptible, little bit odd, but they

admired him. Now, you have to ask them. You really would have to ask them. But, I mean, I just

know from working the phones and calling counterparts in other offices that this guy was

respected. It's not like, "Oh god, it's Proxmire's office calling with another harebrained

scheme." No. It wasn't that at all.

Robert Kuttner Interview Transcript 48 Proxmire Did you have a sense of the relationship between Gaylord Nelson and Bill Proxmire?

Not really. I mean, they got along. But no, that was above my pay grade. I didn't have a sense.

There was a wonderful one-liner in those years. People would say, "I have been here since the

days when Gaylord Nelson had hair and Bill Proxmire was bald." And that, you know, that got

some laughs - the hair transplant.

Right, right, right. Were you there when that — that happened before, I think.

I think it was -

In the early '70s.

Yeah. I think it had happened not all that long before I got there.

The hair plugs.

Because it was still the object of comment. But, you know -

So maybe he had a little vanity or a sense of public image being important enough to him.

Robert Kuttner Interview Transcript 49 Proxmire Yeah, oh yeah. Well, he went bald at a fairly young age, so he's entitled to that. So - what's so

interesting is that he was, as I said, a little idiosyncratic, a little quirky, but just a delightful

person and rock solid where it counted. I mean, you would never use the word flaky. He was

solid all the way down, even though he had these personal atypical traits. It's not your average

Senator who jogs to work. It's not your average Senator who gets a hair transplant or decides it

would be kind of cool to not take any money from anybody. But at worst, they were harmless

and at best they were entirely admirable.

And he was a workhorse, it sounds like.

Oh, totally, absolutely.

Tenacious and hardworking.

Yeah, he'd be the last guy in the office. I mean, he'd be there late - and no fuss. I mean, I think

he also - to be a successful politician, you really have to like people. And he liked people. And that's true of his constituents, his staff, his -1 mean, in a hearing, his state of mind or his attitude

would be, "Gee, this is intriguing. This is really interesting. Tell me more about this." And it was

genuine; huge amount of intellectual curiosity - "How does this work? Tell me; explain it to


How do you think he influenced you?

Robert Kuttner Interview Transcript 50 Well, as I say, in terms of profession and career, that was where I really got to understand the

banking system. It gave me a hands on sense of not just how the Senate worked, but how it could

work when principled, smart people were running it. It gave me a good view of government,

something that's not very fashionable or plausible nowadays. And I think he and Ken were both terrific role models in the sense of what a good boss is like - somebody who is exacting and sets

his high standard, but somebody who is totally fair. I mean, I had one experience with Ken where

I turned in a draft of this Consumers Guide to Banking. And it wasn't a very good piece of work.

And Ken just said, "Look, Bob. I mean, I know you don't think this is the greatest project in the

world, but you gotta do better than this." So it was a very nice way of saying, "I have

expectations and we have high standards and you can do a better job." It wasn't nasty. It wasn't threatening. It wasn't, "You're going to be fired over this." And I think that was the only

reprimand I ever got from Ken, but it was the kind of tone that Proxmire set for everybody.

Now, did you ever have disagreements with him?

I had one disagreement, and I was too junior to really voice it in a serious way. And because it

was both Ken and Prox who were on the other side, it was almost impossible to get any headway.

But so it's the mid '70s and commercial banks are losing a lot of money because of inflation.

And so the commercial banks are coming in and they're saying, "Look. Here are the investment

banks. They're making money hand over fist. We, the commercial banks, are more important to the monetary system. We're more important to the banking system. Let us do some of the stuff that investment banks do and the consumer will benefit because there'll be more competition."

Robert Kuttner Interview Transcript 51 i.e. repeal —

i.e. repeal Glass-Steagall. Or, at that point, that wasn't plausible. That didn't happen for another twenty some years, but repeal pieces of Glass-Steagall. "Let us underwrite municipal bonds," or,

you know, "Let us in on this bonanza or some of it." And I think because investment bankers

were making so damn much money, that Prox and Ken were both somewhat swayed by the


Hour 2/30:25 RK's Disagreement with BK on Glass-Steagall, BP's Influence on RK's Post-Senate Career, BP's Legacy, Speculation as to BP in Today's Political Climate

To level the playing field or make them more competitive.

Yeah, and the argument that there would be more competition, competition would lower prices,

blah, blah, blah. I was very skeptical. I mean, I just, as a student of the New Deal, I just felt that

Glass-Steagall was there for a very good reason. That this was a wall that needed to be

maintained and once you breached it, one breach would lead to another breach. And so I was the

only one in the office who felt that, "Let's not go there."

You and Paul Volcker.

Yeah, me and Paul Volcker, right.

Robert Kuttner Interview Transcript 52 He was not in the office, but nonetheless.

Right. Well, that was a little later, but -1 mean, obviously, as a relative - now, I was on the

Banking Committee staff. I was a professional, so I was senior in that sense, but I was certainly junior to Ken and junior to Proxmire. So you size up the situation and you say, well look, the

Chief of Staff and the Senator are on one side of the issue. I'm going to make a little foray. I'm

going to very tentatively suggest that, "You know, you might want to think about this or that

ramification," but then you want to back off because you have to maintain your own credibility

with your boss. So, I just did not choose to make an issue of it and I have the grim satisfaction of

having been proven right. And I think - when did Proxmire leave the Senate?

'89, which was around the time —

So we were halfway down the drain by '89 in the sense that the Fed, by administrative decision,

had partially repealed Glass-Steagall. The really bad stuff happened after he left. The really bad

stuff happened in the '90s. But I think - and Ken is a better source on this -1 think the fact that

Ken and Proxmire were somewhat sympathetic to that made it easier for the industry to get, you

know, some momentum going. This is long after I left.

Well, hindsight is 20/20 and it 'd be interesting to —I think later on when he did some writing

afterwards he did regret his stance on that.

Is that right?

Robert Kuttner Interview Transcript 53 Yeah.

What did he write afterwards?

Just that he wished he could have prevented some of what happened in the Savings and Loan

crisis, too.

Yeah, yeah.

And that he should have seen it coming, you know?

Well, he was - I mean, on the Savings and Loan stuff, where the bad guys were Garn and St.

Germain. And that legislation, that was '82, long after I left. But it was legislation that let

Savings and Loans gamble. I mean, Prox was not sympathetic to that stuff.

And he was no longer Chairman at that point because he had lost the chairmanship to Garn.

Yeah, the Republicans -the '81 Republicans took over, so he was Ranking Minority. But

Freddie St. Germain, who was just a terrible piece of work - totally in the industry's pocket -

was a Democrat was the Chair of the House Committee - about as far from Proxmire ethically

and ideologically as you could possibly get - worked hand and glove with Garn. And Garn was

really a piece of work. I mean, the fact that some of what Garn said, and I've got the transcripts

Robert Kuttner Interview Transcript 54 in the hearings for the Home Mortgage Disclosure Act, was wildly intemperate. I mean, he just thought this was an outrage. And Prox kept his cool.

It'd be interesting to look at those.

Oh, yeah.

So you had three years there. Is there anything we haven't covered?

Not really. I mean, I just have these vivid memories of particular episodes. You know, the day- to-day stuff was the day-to-day stuff. But I'll tell you, it's a vivid period of my life. I mean, my

memories of-you know, if you would say to me, "Well, tell me about 1982 to 1985," I would

have to really think for a minute and then it would come back to me what I was doing in those

years and, "Oh, yeah." But this was a particularly vivid period in my professional life. And I felt

I was doing important work.

It influenced your interests?

Oh, very much so, yeah. Because what I did right after I left was I went and I wrote a book about the taxpayer revolt, which was very much a book about where economics met politics. And that,

from then on, became my expertise. So all of my books were about the juncture of politics and

economics in some particular way. So it was a pivotal, defining point.

Robert Kuttner Interview Transcript 55 And gave you some credibility in the future, it sounds like.

Yeah, yes, oh, yeah.

With housing groups and —

Oh, yeah, very much so.

7 might have asked you this already in terms of what you think might have influenced him and his

interests? If you have any other thoughts on that, I'm curious about that.

I didn't know him well enough. I mean, I just -1 parachuted into his life for three years when he

had just become chairman.

And then you sort of parachuted out?

Parachuted out.

Did you have much contact with him after that?

Little bit.

Or followed his career?

Robert Kuttner Interview Transcript 56 Little bit, little bit. I mean, I stayed in touch with Ken. I must have maybe saw him a couple of times over the years when I was reporting on something. But not really. I wasn't really inner

circle. And so - no, I'm not the right person to ask that question. I don't really have a sense. I

mean, I can give you a pretty reliable snapshot of what he was like to work with during those three years.

Is there anything in his subsequent years in the Senate that stands out to you that you followed? I

know, for example, his Genocide speeches daily.

Oh yeah, of course.

You know, eventually led to the ratification of the Genocide Convention.

Absolutely, yeah, yeah.

In '86 after over twenty years — almost twenty years.

Remarkable. Well, and he was Lou Gehrig. I mean, he was - didn't he set the record for never

missing a vote?

Uh-huh, uh-huh. (affirmatively)

Robert Kuttner Interview Transcript 57 You know; very unusual guy.

What do you think his legacy is, or should be? I mean, the purpose of this project is to create a

document about his tenure in the hopes, I think, that people will learn from it, maybe public

servants will be inspired or —

Well, he was a totally, honorable, principled, smart public servant. And I think his legacy

demonstrates that it is possible to get elected to high office and use high office for the public

good and play that kind of role.

Do you think he could survive in today's political climate and get elected and —

I actually do, because the people like him who are a little different and who have some charm

and who are political naturals sometimes capture the media's fancy. Now, it would be much,

much, MUCH, much harder to do it without any money. I think that's the biggest, single

difference. But I think he'd be an attractive figure, and particularly in a place like Wisconsin

where there's an appreciation, when Wisconsin is in a more liberal mood, you know, of unusual

people who don't fit the political stereotype; like a Russ Feingold.

Right; more independent.

Robert Kuttner Interview Transcript 58 Yeah. And Prox was very much - you know, even though if you looked at his voting record, it

was liberal Democrat straight down the line. But he was very much of an independent, a little bit

of a maverick.

So you don't think things are too broken for somebody like him to ascend?

Well, I think the money -1 think he might have to compromise on that stuff. He might have to

raise money. I can't imagine how you would get elected to office today just based on what they

call free media. I mean, if I -

And shaking hands.

Yeah. You know, how are you going to run a campaign? How are you going to hire staff? You

can't do it just on volunteers. You presumably can't do it with no commercials. So, you know, if

he - at one point he was a journalist, wasn't he?

Uh-huh. (affirmatively)

So, if, for example, he had become very well known as a journalist and had a high profile in the

state and decided to run for public office, maybe that would be enough; maybe he'd have enough

name recognition that he could put rigid strictures on where he'd raise money.

Robert Kuttner Interview Transcript 59 Any speculation on how he would think the Obama administration is doing on its course,

especially as related to and the banking industry?

I think he'd be one of those Senators who was critical of the administration for not being tough

enough on Wall Street. But, you know, it's speculative - sort of reading my own views -


Well, the system has certainly changed over the years. The Senate has changed.


And politics. Any other things that I haven't asked you?

I think that's it. Now we've got a buzz saw in the background, so -


No, I think that covers the ground. And I will go back and edit the bio.

Okay. Thanks so much for letting me interview you.

Thanks for coming. Sure, of course. Thanks for making a house call.

Robert Kuttner Interview Transcript 60 Proxmire